Gurdas S Choithramani v. The Hongkong and Shanghai Banking Corporation Ltd

CACV 117/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 117 OF 2014

(ON APPEAL FROM HCA 2073 OF 2011)

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JUDGMENT

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Hon Yuen JA:

1.1.1. On 23 September 2016, the court directed that:

(1) CACV117/2014, which is Mr Gurdas S Choithramani’s appeal from DHCJ Whitehead’s Judgment given on 28 April 2014 in HCA2073/2011 (“the 2011 action”), should be restored for hearing; and

(2) notice of hearing to be given to the appellant, the Official Receiver’s Office the trustee in Mr Choithramani’s bankruptcy adjudicated in 1996 (“the 1^st Bankruptcy”) as well as his bankruptcy adjudicated in 2015 (“the 2^nd Bankruptcy”), and HSBC the respondent in the appeal.

1.2.Notice was given on 30 September 2016 to all parties of the restored hearing on 14 February 2017.  The original notice indicated that the hearing was for directions.  It was corrected shortly before the hearing to reflect the direction referred to in para. 1.1(1) above. 

1.3.At the restored hearing, Miss Margaret Ng counsel for Mr Choithramani, applied for an adjournment pending:

(1) Mr Choithramani’s application by summons filed on 27 January 2017 under s.33 Bankruptcy Ordinance, to annul the 1^st Bankruptcy (which was presented on the petition of BNP and from which Mr Choithramani was discharged on 24 September 2003) (“the annulment application”); 

(2) Mr Choithramani’s proposed application¹ in the 1^st Bankruptcy under s.83-4 Bankruptcy Ordinance for a declaration that the OR has by her conduct given consent to Mr Choithramani to take and continue proceedings (the 2011 action) against HSBC; or alternatively for an order that the OR do assign the proceedings to him (“the assignment application”). 

Background

2.A brief history of the factual background has been set out in paras. 2-22 of my Judgment dated 3 December 2014 (annexed hereto) which paragraphs are incorporated as part of this Judgment.  The following paragraphs are supplemental to it.

3.As noted in paras. 20-22, on 28 April 2014 DHCJ Whitehead

(a) refused Mr Choithramani’s application to adjourn the hearing of HSBC’s application to strike-out his claim in the 2011 action;

(b) proceeded to strike-out the 2011 action on the basis that Mr Choithramani had no locus standi because the causes of action had accrued before Mr Choithramani’s 1^st Bankruptcy; and

(c) ordered Mr Choithramani to pay HSBC’s costs assessed on a gross sum basis at $1.55m.

4.Mr Choithramani filed the present appeal on 26 May 2014.

5.1.On 11 July 2014 HSBC served a statutory demand on Mr Choithramani on the ground of his failure to pay the costs of $1.55m.

5.2.Mr Choithramani applied to stay DHCJ Whitehead’s order and to set aside the statutory demand.  These applications were refused by DHCJ Wilson Chan (now Wilson Chan J) on 18 September 2014. 

5.3.Mr Choithramani applied for leave to appeal DHCJ Chan’s order out of time.  On 20 November 2014 his application was dismissed by this court.

6.1.Meanwhile HSBC had applied for security for costs of the appeal.

6.2.On 3 December 2014, I gave judgment ordering security for costs (which was subsequently paid into court).

7.1.However on 9 March 2015, the 2^nd Bankruptcy was made against Mr Choithramani pursuant to the statutory demand which remained unsatisfied.

7.2.As the OR was made trustee in bankruptcy, on 9 April 2015 the court stayed this appeal pending the OR’s decision on the progress of the appeal.

8.There then followed correspondence between the solicitors for HSBC and the OR on the status of the latter in the appeal.  Eventually the court gave the direction for the restoration of the appeal referred to in para. 1.1(1) above.

Discussion

9.Miss Ng applied for an adjournment so that Mr Choithramani could pursue the annulment application, and failing that, so that he could pursue the assignment application.

10.In my view, these applications have come far too late for this court to exercise its discretion to put back the further progress of this appeal, which was filed some 32 months ago. 

11.1.The bankruptcy order sought to be annulled is the 1^st Bankruptcy Order which was made in 1996 and discharged in 2003. 

11.2.Mr Choithramani says in his affirmation that he became aware of the grounds on which the annulment application is made in 2006, when HSBC provided documents for the assessment of damages following his success at first instance in HCA11077/1994.  That was 11 years ago.  

11.3.He alleges that it was only after the first instance judgment was overturned on appeal that he carried out a detailed review.  No satisfactory reason is given as to why he did not do so earlier. 

11.4.He commenced proceedings against HSBC in 2011 with a 54-page statement of claim.

11.5.By April 2014 at the latest, his then solicitors (“JNK”) had written to the OR indicating that he intended to apply for annulment of the 1^st Bankruptcy.  That was nearly 3 years ago.  

11.6.Clearly therefore Mr Choithramani has been in possession of the materials which he says support his case for annulment for a considerably long period of time.  No satisfactory reason has been given why he has waited until 27 January 2017 to make the annulment application. 

11.7.It is one of underlying objectives of civil justice reform which the courts are enjoined to implement that cases should be dealt with as expeditiously as are reasonably practicable.  It is the duty of all parties to implement this objective.    

11.8.By reason of the above, I would dismiss the application to adjourn the appeal pending the resolution of the annulment application, which has been made very late and for which delay no satisfactory reason has been given.

12.1.In my view the same objection of unexplained delay applies to the proposed assignment application which is also intended to be made in the 1^st Bankruptcy.  Even if we were to put to one side the correspondence between Mr Choithramani and the OR (some under the reference of Esquire’s winding-up) which began in 2009, the fact of the matter is that by April 2014 (if not before), he was aware of the need for the OR’s consent/assignment. 

12.2.It would appear that on 22 April 2014² JNK wrote to the OR for consent/assignment.  

12.3.Indeed on 28 April 2014 Mr Choithramani’s then counsel asked DHCJ Whitehead for an adjournment “on the basis that he wishes to take steps to procure the assignment to him by the Official Receiver of the various causes of action a subject of these proceedings and/or to seek to bring an action with the consent of the Official Receiver”.  The judge refused to adjourn the hearing. 

12.4.Two days later JNK wrote to the OR saying:

“In the circumstances, our client would be grateful if you could grant your consent urgently so that our client can appeal against the said decision”.

12.5.In response, on 16 May 2014 the OR required from JNK (a) materials to demonstrate the merits of Mr Choithramani’s claim, (b) an indemnity for costs for which the OR may be liable if the right of action is assigned to him, and (c) an estimate of costs.

12.6.In a letter dated 2 September 2014 to JNK, the OR reiterated the view that Mr Choithramani was aware of the need for consent/assignment and had never sought it previously.

12.7.Yet, notwithstanding Mr Choithramani’s awareness of this requirement for at least the past 2½ years and despite the lack of progress in the correspondence with the OR, no application was made, save a proposed, conditional application at the door of this court.

Order

13.By reason of the above, I would dismiss the application to adjourn the appeal pending the resolution of the annulment application and the proposed assignment application, with an order nisi that Mr Choithramani is to pay the costs of the application to the OR and HSBC.

14.As Miss Ng said she had inadequate time to prepare for the hearing of the appeal by reason of the matters set out in para. 1.2 above, we gave directions on 14 February 2017 that all parties have leave to file and serve further written submissions therefor (limited to 15 pages) within 7 days of the date of this Judgment.  Unless further submissions are required, this court will then hand down its Judgment on the appeal.

Hon Kwan JA:

15.I agree with the judgment of Yuen JA.

Hon Poon JA:

16.I agree with the Judgment of Yuen JA.

Ms Margaret Ng, instructed by Arun Nigam Associates, for the Plaintiff

Mr Nicholas David Hunsworth of Mayer Brown JSM, Solicitors for the Defendant

Mr Jose Maurellet SC, instructed by the Official Receiver